The Guinea international is yet to make his debut for the Rhone club, but scored 14 goals on loan at Ligue 2 side Angers last term.
Yattara's existing deal was due to expire in 2016, but Lyon chiefs were keen to tie the 20-year-old down long-term.
He gained top-flight experience with a temporary spell at Troyes in the 2012-13 campaign, scoring three times in 23 appearances.
Yattara will now return to a Lyon side shorn of their most experienced striker after Bafetimbi Gomis moved to Swansea City on a Bosman transfer.
With pre-season training under way, Yattara will compete with fellow academy graduates Alexandre Lacazette and Yassine Benzia for a spot in Hubert Fournier's attack next term.
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